Aggregation and processing of check-based payments

ABSTRACT

The present subject matter involves a system and method for producing and processing electronic transactions, including electronic checks, in a secure manner. In various embodiments, a secure server provides an electronic check service that maps payees to participating lockbox service providers and provides electronic payment instructions from the payor to the lockbox service providers to process payments to the payees. In various embodiments, a check is printed to fulfill Check21 Act requirements, electronic images are obtained of front and back of the printed check, and check image pairs are created of the electronic images of the front and back of the printed check. In various embodiments, paper items are processed where the electronic check service does not find an electronic deposit match. In various embodiments, the electronic lockbox files are used in a secure electronic payment platform that assists in the generation of electronic checks.

CLAIM OF PRIORITY AND INCORPORATION BY REFERENCE

The present application claims the benefit under 35 U.S.C. § 119(e) ofU.S. Provisional Patent Application 62/830,686, filed Apr. 8, 2019,which is hereby incorporated by reference herein in its entirety.

TECHNICAL FIELD

This application relates generally to electronic financial transactionprocessing, and more particularly to the secure processing of electronicremittance payments, that is a payment from a Buyer (Payor) to a Seller(Payee or Biller).

BACKGROUND

A monetary transaction typically involves a payor providing funds to apayee for goods or services rendered in response to a bill or invoice.One common way for a payor to provide funds to a payee is in the form ofa negotiable instrument, such as a check. A check is a negotiableinstrument drawn against the payor's financial institution whichincludes the financial institution's bank routing number, payor'saccount number, payment amount, payee's name, date, and payor'sendorsement. The payee can cash the check at a bank or other financialinstitution, deposit the check into the payee's account, or endorse itfor payment to the order of another person or legal entity. The bankuses the information provided on the check to determine the amount ofthe check, a bank and account where the funds are located, and sometimesthe payee account in which to deposit the funds.

This system of transferring funds between a payor and a payee using aphysical document, such as a check, presents several challenges. First,most payors are making several payments in a payment cycle and payorsmust make sure that the payor information is up to date and accurate.Second, payee information may vary over the course of a year, making itchallenging to remit payment to the proper payee destination. Third,different payees have different modes of accepting payments, each ofwhich must be accommodated. Fourth, the records of the payments may haveto be provided to update accounting software so that the payments arelogged as having been made. Fifth, the payee needs to know if the amountof the payment is what was expected as reflected on the bill or invoice.Other challenges exist, and the foregoing list is provided todemonstrate some of the challenges.

In addition, the check clearing system based on the exchange of physicaldocuments can be costly and add time delays to the check clearingprocess due to transportation and processing of large volumes ofphysical documents. In the United States of America, prior to 2004 if apayee deposited a check written by a payor from one bank into an accountat a different bank, the banks would have to physically exchange thepaper check before the money would be credited to the account. In 2004the Check Clearing for the 21st Century Act (Check21 Act) was passed inthe United States which makes the digital image of a check (electroniccheck or eCheck) legally acceptable for payment purposes in the samemanner as a traditional paper check. Under the Check21 Act, rather thanexchanging paper checks between banks when a payee deposits a check, onebank can send an image of the check to the other bank. Similarly, thephysical presentment of a paper check and paper invoice or bill to apayee can be costly and add time delays due to transportation of largevolumes of physical documents. Additionally, the conversion of theinformation found on physical document (e.g. checks, bills, invoices)can be costly and add time delays due to the process and accuracy of theconversion process (e.g. use manual data entry to enter information fromthe document into a computer and/or scan documents into a computer anduse Optical Character Recognition (OCR) algorithms to recognize andinterpret information from the document.

Thus, there is a need in the art for a trusted electronic paymentplatform to process electronic payments, including electronic checks, ina secure manner.

SUMMARY

The present subject matter involves a system and method for producingand processing electronic payments and remittance information includingelectronic checks in a secure manner.

In various embodiments, enrollment information is received from payorsand payees, including authorization to process electronic payments ordeposits to select payees. A secure portal is provided to authenticateelectronic payment instructions from the payor, in various embodiments.In various embodiments, electronic payment instructions are receivedincluding payment data from the payor via the secure portal, the paymentdata including an amount of a payment and identifying at least onepayee. In various payments, the payment is made using an electroniccheck (eCheck) electronically sent to a lockbox at a participating bankfor the payment to the payee. In various embodiments, a check is printedto fulfill Check21 Act requirements, electronic images are obtained offront and back of the printed check, and an electronic deposit isperformed in the amount of the payment to the payee using an electroniclockbox system of a banking partner. In various embodiments, a bill orinvoice is printed that accompanies the check or eCheck. In cases whereelectronic payments are not recognized for a payee, paper items can besent.

This Summary is an overview of some of the teachings of the presentapplication and not intended to be an exclusive or exhaustive treatmentof the present subject matter. Further details about the present subjectmatter are found in the detailed description and appended claims. Thescope of the present invention is defined by the appended claims andtheir legal equivalents.

BRIEF DESCRIPTION OF DRAWINGS

FIG. 1 is a flow diagram demonstrating traditional payment flows of abank with the payor as a client.

FIG. 2 is a flow diagram demonstrating payment flows of a bank with thepayor as a client using a lockbox and electronic checks (eChecks)according to one embodiment of the present subject matter.

FIG. 3A is a flow diagram demonstrating payment flows of a bank with thepayor as a client using an electronic lockbox and eChecks according toone embodiment of the present subject matter.

FIG. 3B is a flow diagram showing the selection of payment modes basedon recorded information about the payee according to one embodiment ofthe present subject matter.

FIG. 4 is a flow diagram demonstrating payment flows of a bank with thepayee as a client using an electronic lockbox and eChecks according toone embodiment of the present subject matter.

FIG. 5 is a block diagram of a machine in the example form of a computersystem within which a set of instructions can be executed, for causingthe machine to perform any one or more of the methodologies discussedherein.

DETAILED DESCRIPTION

The following detailed description refers to subject matter in theaccompanying drawings which show, by way of illustration, specificaspects and embodiments in which the present subject matter may bepracticed. These embodiments are described in sufficient detail toenable those skilled in the art to practice the present subject matter.References to “an”, “one”, or “various” embodiments in this disclosureare not necessarily to the same embodiment, and such referencescontemplate more than one embodiment. The following detailed descriptionis, therefore, not to be taken in a limiting sense, and the scope isdefined only by the appended claims, along with the full scope of legalequivalents to which such claims are entitled.

Payments by companies in response to bills and/or invoices arefrequently accomplished using ERP (enterprise resource planning)software or accounting software that manages and integrates a company'sfinancial records and activities, among other things. Such systemsfrequently employ payable files from various databases to perform batchpayments. Companies often employ a check issuance file which can be usedby a payor to disburse checks. FIG. 1 is a flow diagram 100demonstrating traditional payment flows of a bank with the payor as aclient. The payors can formulate payable files 102 and check issuancefiles 104 from a variety of financial software. Various account payableprograms 106 can be used to create check disbursements from the payor'sbank. Some programs 106 include, but are not limited to those by SAP,Oracle, Excel, Microsoft and QuickBooks. Payable files 102 and checkissuance files 104 are processed by integrated payable services 108 suchas ACH services 110, wire services 112, and other payment 114 and checkdisbursement services 116. The resulting paper checks and correspondingbills and/or invoices (if available) are combined (120) and mailed topayee bank lockbox services 122 and directly to non-lockbox payees 124.

A lockbox is a collection and processing service companies use tocollect payments from a dedicated postal box to which the companydirects its customers to remit payment to. The company or its lockboxservice provider, which may be a bank or other service provider, makesseveral collections each day and deposits the collected funds in thecompany's bank accounts.

The present subject matter provides systems and methods for aggregationand electronic processing of check-based payments. In variousembodiments, the present subject matter provides a way to network withbanks and other financial institutions to reduce the cost of operationsto lockbox clients. In various embodiments, the service replaces paperchecks with electronic import to a bank's lockbox.

FIG. 2 is a flow diagram 200 demonstrating payment flows of a bank withthe payor as a client using a lockbox and electronic checks (eChecks)according to one embodiment of the present subject matter. The systemadds an eCheck file 230 for eCheck payments electronically produced byan eCheck Service 282 of the payor's bank 280. This allows eChecks 234to be produced, scanned, and electronically deposited (such as byelectronic deposits vial ACH or by a debit card), as from a payablesfile 202 and eChecks file 242 instructions as opposed to check draftsthat are printed and mailed. The system also allows for paper items 220to be sent to the payee bank's lockbox 222, or to be directly mailed tonon-lockbox payees 224.

In various embodiments, participant banks will send the eCheck Servicedisbursement files of check and invoice details to be printed andmailed. FIG. 3A is a flow diagram 300 demonstrating payment flows of abank with the payor as a client using eChecks and an electronic lockboxaccording to one embodiment of the present subject matter. As shown inFIG. 3B, the payor's ERP or accounting system will determine outgoingpayments (payables) at 350. The payor's bank will determine if thespecific payee banking account information is known to reach the payeeelectronically, at 352. If so, then the payment can be cleared via ACHor some other electronic payment instrument, at 354. If not, the eCheckService will determine if check and invoice details are destined for apayee P.O. Box address of a payee that is registered to receiveelectronic lockbox files, at 356. An electronic lockbox file is alockbox file that is converted to an electronic version. If the payee isregistered to receive such files, then the lockbox processing isoutsourced to one of the participant banks or not (e.g., resulting in amatch or no match). If there is a match, then the check will be printed,imaged, discarded (to meet current industry requirements), bundled withinvoice details, aggregated with other items at 358 and sent toparticipant bank in an electronic file at 360. The electronic file isreceived by a network bank lockbox service. If there is no match, thechecks and invoice details will be printed and mailed at 362. Thelockbox platform (e.g., IRPS or Image Remittance Processing System) willbe enhanced to ingest the electronic file and process through thelockbox system consistent with paper presentment.

In various embodiments, the eCheck Service 336 includes storage or otherdynamic service (e.g., an application programming interface (API)) thatcan map a P.O. Box number to a participating lockbox bank or otherlockbox service provider and provide an electronic lockbox file 338 forpayee lockbox services to process checks for payees in the eCheckService network 340. One benefit of this electronic lockbox file is thatit may include specific and accurate information from both bill orinvoice and the check saving the need for downstream reconcilement. Invarious embodiments, tracking individual check items, individual billitems, individual invoice items and files could deploy blockchain ordistributed general ledger approaches to ensure payments are not lost,payors are known and accurate and payees are known and accurate. Invarious embodiments, given the potential real time flow of transactionsfrom payor to payee, the eCheck Service could act as a platform forpayors and payees to negotiate terms of any payment which may result indiscounts, credits or other monetary or non-monetary benefit to eitherparty.

FIG. 4 is a flow diagram 400 demonstrating payment flows of a bank withthe payee as a client using an electronic lockbox and eChecks accordingto one embodiment of the present subject matter. In various embodiments,the payee's bank 410 receives electronic lockbox files 408 from thepayor's eCheck Service 436. The electronic lockbox file 408 is receivedby a wholesale lockbox system 412 at the payee's bank 410 and paperchecks are also captured 414 and recorded by the system. The resultingpayments are reported back to the payor's banks 440 via X9 files 416 andare also recorded as ERP files 418 to manage the payment records at thepayee. This allows the participant payee banks 410 to utilize aneDeposit box feature to disintermediate eChecks and create an X9 file416 for payor's bank. The result is an eChecks “clearing house.”

In various embodiments, the present subject matter provides reducedupfront costs for completing an A/P (accounts payable) or A/R (accountsreceivable) cycle. In various embodiments, the present subject matterprovides for aggregation and delivery of bulk check-based payments inreal time or near real time. In various embodiments, the electroniclockbox system provides for improved retention of lockbox clients byincreasing the value and differentiation of the electronic lockboxsystem. In various embodiments, the present subject matter provides apayments platform to allow buyers and sellers to negotiate discounts andrebates for different transaction terms. Additional advantages includefaster payment, acknowledgement of receipt, inclusion of remittancedetails, fewer posting exceptions, and improved cash management forpayors and payees.

In various embodiments the payors and payees are logged into the paymentsystem using a client device, such as a desktop computer, a mobilephone, a laptop computer, or other computing device. In variousembodiments the client executes a browser-based program or API interfaceto communicate with the payment system. In various embodiments, theclient executes an applet or other software to communicate with thepayment platform.

The present subject matter can be practiced in electronic paymentsystems, such as in the Trusted Secure Electronic Payment ProcessingPlatform described in U.S. Provisional Patent Application Ser. No.62/742,047, filed on Oct. 5, 2018, which is hereby incorporated byreference in its entirety. In various embodiments, the front and backside of the check are printed using the platform to provide a papercheck, which can be used to document an electronic transfer and whichcan be scanned and presented using the Check 21 process. In suchembodiments, the payor can provide payee and an amount of the payment tothe secure electronic payment platform. The secure electronic paymentplatform can composite front and back sides of a check that can beremitted for payment using the Check 21 infrastructure in cooperationwith its financial institution partners to provide payment to the payee.

In various embodiments, a printed check is imaged (such as by scanning)using the secure electronic payment platform in a format suitable forCheck 21 processing. In various embodiments, the secure electronicpayment platform formulates payment instructions to banks (or otherfinancial institutions) using the Check 21 infrastructure, and completespayments and collects funds for payments.

According to various embodiments, the payor registers with the secureelectronic payment platform, and authorizes it to process electronicpayments and/or deposits on behalf of the payor to select payees. Thepayor sends electronic transaction data, such as is found on checkfront, using a graphic user interface (GUI) to the secure electronicpayment platform. In various embodiments, the transmission is sentwithout sending an image of a check. A virtual private network (VPN) isused to transmit account related information, in various embodiments. Invarious embodiments, the information includes an amount of payment andpayee or payee's account. In various embodiments, the funding source forthe payment is a default source. In various embodiments, the fundingsource is designated and provided with the other information. In variousembodiments, secure electronic payment platform is configured to receivethe electronic payment information and generate a Check 21 complianteCheck for payment of the payor.

In various embodiments, the secure electronic payment platform isconfigured to use a server to enroll payors and payees and to collectand record their preferences and authorizations. Payors can be provideda secure access to a database of payees and can request that certainpayees are added to the system. The operator of the secure electronicpayment platform has storage and secure database features that canassist in the enrollment of new payees, record their paymentpreferences, and obtain the necessary agreements to deposit electronicpayments according to those preferences. Payees can authorize the secureelectronic payment platform to endorse payments from the payor as thepayee has elected, thereby allowing it to create images of a front andback electronic check for further processing as set forth in thisapplication and as set forth in U.S. Provisional Patent Application Ser.No. 62/742,047, filed on Oct. 5, 2018, which is incorporated byreference in its entirety in this application.

The present subject matter deployed in the secure electronic paymentplatform includes various advantages for various embodiments, includingone or combinations of the following advantages. One of the advantagesof the use of a secure electronic payment platform is that it canauthenticate payors to prevent fraud. Another advantage of the presentsubject matter is that the trusted processing platform may use theCheck21 infrastructure to pay payees. Other advantages exist which arenot described herein.

FIG. 5 is a block diagram illustrating a machine in the example form ofa computer system 500, within which a set or sequence of instructionscan be executed to cause the machine to perform any one of themethodologies discussed herein, according to an example embodiment. Forexample, the computer system 500 could be used at a payor bank toprocess payment information. The computer system 500 could be used atthe eCheck Service to process check payments. The computer system 500could be used at the payee bank to process check payments. Inalternative embodiments, the machine operates as a standalone device orcan be connected (e.g., networked) to other machines. In a networkeddeployment, the machine can operate in the capacity of either a serveror a client machine in server-client network environments, or it can actas a peer machine in peer-to-peer (or distributed) network environments.The machine can be a personal computer (PC), a tablet PC, a hybridtablet, a set-top box (STB), a personal digital assistant (PDA), amobile or cellular telephone such as a smart phone, a web appliance, anetwork router, switch or bridge, or any machine capable of executinginstructions (sequential or otherwise) that specify actions to be takenby that machine. Further, while only a single machine is illustrated,the term “machine” shall also be taken to include any collection ofmachines that individually or jointly execute a set (or multiple sets)of instructions to perform any one or more of the methodologiesdiscussed herein.

Example computer system 500 includes at least one processor 502 (e.g., acentral processing unit (CPU), a graphics processing unit (GPU) or both,processor cores, compute nodes, etc.), a main memory 504 and a staticmemory 506, which communicate with each other via a link 508 (e.g.,bus). The computer system 500 can further include a video display unit510, an alphanumeric input device 512 (e.g., a keyboard), and a userinterface (UI) navigation device 514 (e.g., a mouse). In one embodiment,the video display unit 510, input device 512 and UI navigation device514 are incorporated into a touch screen display. The computer system500 can additionally include a storage device 516 (e.g., a drive unit),a signal generation device 518 (e.g., a speaker), a network interfacedevice 520, and one or more sensors (not shown), such as a globalpositioning system (GPS) sensor, compass, accelerometer, or othersensor.

The data storage device 516 includes a machine-readable medium 522 onwhich is stored one or more sets of data structures and instructions 524(e.g., software) embodying or utilized by any one or more of themethodologies or functions described herein. The instructions 524 mayinclude a machine learning system or algorithm, and can also reside,completely or at least partially, within the main memory 504, staticmemory 506, and/or within the processor 502 during execution thereof bythe computer system 500, with the main memory 504, static memory 506,and the processor 502 also constituting machine-readable media.

While the non-transitory computer-readable storage medium 522 isillustrated in an example embodiment to be a single medium, the term“machine-readable medium” or “computer-readable medium” can include asingle medium or multiple media (e.g., a centralized or distributeddatabase, and/or associated caches and servers) that store the one ormore instructions 524. The term “machine-readable medium” shall also betaken to include any tangible medium that is capable of storing,encoding or carrying instructions (e.g., instructions 524) for executionby the machine and that cause the machine to perform any one or more ofthe methodologies of the present disclosure or that is capable ofstoring, encoding or carrying data structures utilized by or associatedwith such instructions. The term “machine-readable medium” shallaccordingly be taken to include, but not be limited to, solid-statememories, and optical and magnetic media. Specific examples ofmachine-readable media include non-volatile memory, including, but notlimited to, by way of example, semiconductor memory devices (e.g.,electrically programmable read-only memory (EPROM), electricallyerasable programmable read-only memory (EEPROM)) and flash memorydevices; magnetic disks such as internal hard disks and removable disks;magneto-optical disks; and CD-ROM and DVD-ROM disks.

The instructions 524 can further be transmitted or received over acommunications network 526 using a transmission medium via the networkinterface device 520 utilizing any one of a number of well-knowntransfer protocols (e.g., HTTP). Examples of communication networksinclude a local area network (LAN), a wide area network (WAN), theInternet, mobile telephone networks, plain old telephone system (POTS)networks, and wireless data networks (e.g., Wi-Fi, 3G, and 6G LTE/LTE-Aor WiMAX networks). The term “transmission medium” shall be taken toinclude any intangible medium that is capable of storing, encoding, orcarrying instructions for execution by the machine, and includes digitalor analog communications signals or other intangible medium tofacilitate communication of such software.

It is understood that other combinations and configurations may beemployed without departing from the scope of the present subject matter.This application is intended to cover adaptations or variations of thepresent subject matter. It is to be understood that the abovedescription is intended to be illustrative, and not restrictive. Thescope of the present subject matter should be determined with referenceto the appended claims, along with the full scope of equivalents towhich such claims are entitled.

What is claimed is:
 1. A method for processing electronic paymentsrequested by a payor, comprising: receiving payables files, checkissuance files, and electronic check files with payment instructions foraggregated payments to payees; converting the payment instructions intoelectronic check files and paper items instructions; and providing anelectronic check service configured to receive electronic check files,map payees to participating lockbox service providers, and send anelectronic lockbox file to the participating lockbox service providersto provide aggregated payments.
 2. The method of claim 1, furthercomprising generating paper payment items from the paper itemsinstructions.
 3. The method of claim 1, further comprising receiving X9files from a payee's bank where electronic lockbox files and paper itemsare processed.
 4. The method of claim 1, wherein mapping payees toparticipating lockbox service providers includes using an applicationprogramming interface (API) to map a post office (PO) box address to aparticipating lockbox bank.
 5. The method of claim 1, wherein mappingpayees to participating lockbox service providers includes using an APIto map a PO box address to a participating lockbox service provider. 6.The method of claim 1, wherein the electronic lockbox file includeselectronic information regarding a bill or invoice.
 7. The method ofclaim 1, further comprising tracking individual check items using adistributed ledger system.
 8. The method of claim 7, wherein thedistributed ledger system includes blockchain.
 9. Them method of claim1, further comprising recording the aggregated payments using enterpriseresource planning (ERP) files.
 10. The method of claim 1, wherein theparticipating lockbox service providers include an image remittanceprocessing system (IRPS).
 11. A system comprising: a computing devicecomprising at least one processor and a data storage device incommunication with the at least one processor, wherein the data storagedevice comprises instructions thereon that, when executed by the atleast one processor, causes the at least one processor to: receivepayables files, check issuance files, and electronic check files withpayment instructions for aggregated payments to payees; convert thepayment instructions into electronic check files and paper itemsinstructions; and provide an electronic check service configured toreceive electronic check files, map payees to participating lockboxservice providers, and send an electronic lockbox file to theparticipating lockbox service providers to provide aggregated payments.12. The system of claim 11, wherein the computing device is configuredto communicate with a client device of the payee.
 13. The system ofclaim 12, wherein the client device includes one or more of a desktopcomputer, a mobile phone or a laptop computer.
 14. The system of claim12, wherein the client device executes a browser-based program or API tocommunicate with the computing device.
 15. The system of claim 12,wherein the client device executes an applet to communicate with thecomputing device.
 16. A non-transitory computer-readable storage medium,the computer-readable storage medium including instructions that whenexecuted by computers, cause the computers to perform operations of:receiving payables files, check issuance files, and electronic checkfiles with payment instructions for aggregated payments to payees;converting the payment instructions into electronic check files andpaper items instructions; and providing an electronic check serviceconfigured to receive electronic check files, map payees toparticipating lockbox service providers, and send an electronic lockboxfile to the participating lockbox service providers to provideaggregated payments.
 17. The non-transitory computer-readable storagemedium of claim 16, wherein the computer-readable storage medium furtherincludes instructions that when executed by the computers, cause thecomputers to perform operations of: generating paper payment items fromthe paper items instructions.
 18. The non-transitory computer-readablestorage medium of claim 16, wherein the computer-readable storage mediumfurther includes instructions that when executed by the computers, causethe computers to perform operations of: receiving X9 files from apayee's bank where electronic lockbox files and paper items areprocessed.
 19. The non-transitory computer-readable storage medium ofclaim 16, wherein the computer-readable storage medium further includesinstructions that when executed by the computers, cause the computers toperform operations of: recording the aggregated payments usingenterprise resource planning (ERP) files.
 20. The non-transitorycomputer-readable storage medium of claim 16, wherein thecomputer-readable storage medium further includes instructions that whenexecuted by the computers, cause the computers to perform operations of:tracking individual check items using a distributed ledger system.